FG DESIGNS NEW EXPORT FINANCING INITIATIVES TO BOOST NON OIL EXPORT

The Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele, said two export financing programmes had been designed to improve non-oil export in the country and total diversification of the economy.

Emefiele said this on Tuesday in Abuja at a conference on stimulating non oil export, jointly organised by the CBN and the Nigerian Export-Import Bank (NEXIM).

He said the new programmes were called the Export Rediscounting and Refinancing Facility (RRF) and Non-oil Export Stimulation Facility (ESF).

He said CBN and NEXIM came up with the initiative to encourage exporters to expand their businesses as well as provide a pool of funds for commercial banks to enable them to support exporters.

“It has been observed that while credit to non-oil exports is declining and currently at an average of 0.6 per cent of total domestic loans to the private sector in the past five years, the domestic credit to the economy has been on a rise.

“The low level of export loans has no doubt also contributed to a large extent to the decline in non-oil export revenue receipts from 10.53 billion dollars in 2014 to 4.39 billion dollars in 2015.

“The impact of these developments on the country’s export growth potentials is quite significant and has become instructive for stakeholders to dialogue on strategies to expand resources for export,” he said.

Also, the Managing Director, NEXIM, Mr Robert Orya, said the new facilities would increase the flow of funds to the non oil export sector.

He said the funds would be provided to all banks that lend to the export sector and that the banks would be mandated to give loans to
exporters at nine per cent maximum.

“If a commercial bank gives you a loan to say that you will return it in a year, the bank will not have money to loan out until you return that money.

“But this window is such that as soon as this money is given to you, they will bring the credit papers and we refinance and give them the same money that they have given you, so they can give to another person.

“As soon as they finish disbursing to that person, they will bring the credit papers to us again and we will be able to refinance.

“So the facility is to encourage banks to lend by providing liquidity for them and to also enable them give this non oil facility at a moderated rate,” he said.

Orya said CBN and NEXIM would meet soon to finalize on the quantum of funds to be provided for the facilities and also the modalities for the disbursement.

He said the funding would also aid exporters to improve on quality standards, packaging issues, export productions and operational challenges.